U.S. closer to decision on sanctioning Venezuela oil: Tillerson

KINGSTON (Reuters) - The United States is closer to deciding whether to impose sanctions on Venezuelan oil, U.S. Secretary of State Rex Tillerson said on Wednesday, at the end of a five-nation tour of Latin America where he discussed the move with regional leaders.

Tillerson said Canada, Mexico and the United States had agreed at a trilateral meeting last week to study what could be done to mitigate the impact of such a move. Tillerson said he had briefed President Donald Trump about the development.

“He said ‘I know you haven’t been in favor of that in the past,’ and I said ‘well, I think things have changed.’ So we’re going to take it to him and let him make the decision,” Tillerson said during a flight to Jamaica, his final stop on the tour.

“We are going to put together a very small, very focused working group to see what we can do to mitigate a decision like that if we do take it. Obviously it will be the president who decides,” said Tillerson, who was chief executive of Exxon Mobil Corp before joining the government.

In Buenos Aires last week, Tillerson said the United States was considering restricting imports of Venezuelan crude oil and exports of U.S. refined products to Venezuela to put pressure on socialist Maduro over his restrictions on political opposition.

Restrictions on Venezuela’s all-important oil industry would represent an escalation of financial pressure on the OPEC member, which is gripped by severe shortages of food and medicine. Sanctions have so far focused on individual members of Maduro’s government and a ban on buying new Venezuelan debt.

Venezuela’s crude oil sales to the United States in 2017 were the lowest since 1991, according to Thomson Reuters trade flows data.

CARIBBEAN AID

Tillerson said any action taken against Venezuelan oil would affect Caribbean countries, many of which have long enjoyed subsidized fuel from the South American nation.

U.S. Gulf Coast refiners would also be affected, Tillerson said.

Reuters reported last year that Mexico was looking at the possibility of replacing Venezuela’s Petrocaribe program that provided cheap loans for oil to Caribbean nations - and has helped Maduro retain diplomatic support in the region.

During Venezuela’s ongoing economic meltdown, volumes shipped under Petrocaribe have dwindled, but some Caribbean nations remain grateful for the years of aid and vote in favor of Venezuela in regional diplomatic bodies.

“We had a very comprehensive discussion on ways to promote increased energy independence, not just for Jamaica but throughout the Caribbean,” Tillerson said at a later press conference with Jamaican Prime Minister Andrew Holness.

“We stand ready to assist Jamaica and other partners in the Caribbean to explore and develop the resources they have, but also to share the abundance of resources that North America enjoys.”

Tillerson said the United States intended to take all actions possible to persuade Maduro to return the country to full constitutional order.

“As to any future steps that the U.S. might take regarding sanctioning oil or products, to put more pressure on the Maduro regime, we are going to take into full consideration the impacts on regional countries.”